good to have everybody on the set at the same time. >> hey, andrew. >> how are you? >> how are you. >> should we be boxes? >> no. we've done that. we have done that a few times that got kind of -- you mean like "brady bunch"? >> we should be thinking of john ritter. >> yeah, but there are two girls -- >> the same thing. >> ay-yi-yi. we're all back and in the top of today's headlines no decision yet on the second aid package for greece. you' european leaders are postponing a decision until at least monday. they canceled the meeting for tonight and has some worried about things. the greek finance minister says his country has met the final two demands to sell that 130 billion rescue. a german government official maintains the greek side still has questions to answer. equities selling off on delays. you can see the ftse is down by about 35 points.

the dax is off by 65 points. in italy it's dropped a 1.4% and in athens better than 2%. of course one of of the big issues reporting these delays are starting to cut it close to the wire. it's got to happen in the next few days to put that package together from all the logistical technical things. >> we are getting up close to that deadline. i think the real deadline is march 19th. >> i just think that they -- when we first started saying they're really good at doing this, at kicking the can down the road. >> it's a fine art and how long, really, i came to grips with it in november, i think, where i understand the euros. they move slowly and we talked to hank the hammer. hammer hank. and he didn't really say that they should have done or would have been able to do what he did. there's just no way. it's not the same thing. it's culturally or having all

these 20 different phrases you want to use, they could could not have done the shock and awe. it's going to take months not days. >> the good news -- >> there is good news. between what hank paulson said to us and what jamie diamond and others have said to us, maybe the comparison to lehman brothers is not that, ultimately if there is a default maybe it's not as treacherous. >> i think it depends on how the default comes about. is it one that happens because they can't? >> true. but i thought both of them and some others, smart people around the table. >> other people have said, like jai jamie said, that if it's a situation where it's just greece, that's one thing. if it's a situation, i guess, what if it's greece and what happens with portugal and the others. >> the best thing that happened yesterday is you finally, i think, got the respect you deserve. i'm surprised -- how did you get here today?

>> geeves. oh. you know, i see where you're going with this. >> it's leaving right now. so you're -- >> now that i've -- once you get the taste of the good life. >> you are totally spoiled at this point. why can't we have choppers? >> you don't have to go across the river. >> we were joking. we were joking because he got here quickly and how many people relatively -- relatively they're not all -- >> i would say at least over a dozen, closer to two dozen e-mailed, called or said something to me including a swra on the street said, so you took a helicopter to work. and believed it. absolutely believed it. you are very convincing, joe. >> no, it's not me. i've convinced people of things on this show over the years that -- >> what about aquaman? >> people will believe anything -- that's what scares you. what's that expression? i never bought into that

expression about underestimating because i think we have the smartest viewers on the planet. >> they should know -- >> you did not. my favorite thing is all your pc manhattan lefty friends said -- they were complaining about your carbon footprint. environmentally. >> do you know how bad that is? >> no, i don't. why? does it stir up the carbon? does it make it worse? what does it do to the environment? tell me. does it stir up all the carbon molecules and make them worse? >> some would argue that -- >> god! how about if the president is heading to hawaii with two 747s. how is that on the environment? that is ridiculous. >> i'll have to look up the carbon footprint. >> we're going to go -- >> it stirs it all up and makes it worse, puts it up into the atmosphere. >> back to europe and talk about what could be the other domino in the eurozone crisis. portugal's economy minister says his country is not greece this this morning.

tough economic reforms in support of the population. he's promising that portugal will not turn its back on the single currency. we tucked about the issue of europe and contagion fears from hank paulson yesterday. take a listen. >> the structural issues around the eu a very difficult issues. difficult analytically. you can put experts in the room and it isn't that obvious what the ultimate solution is. they're different politically and then you have the issues around the fiscal problems of several of the member states. you know that is going to take a good while to griped on. >> silvia wadhwa is in lisbon this morning talking to portuguese officials. she will join us with a live report at 6:30 a.m. eastern. >> did you find out? >> i did. they have a high carbon footprint, helicopters do,

because the types of engines, either piston or gas turbines are unlikely to have a thermal efficiency. in other words 75% of the heat energy of the fuel is wasted. >> wow. but you're talking about a lot of co2. >> you asked. >> the same thing that plants -- how much do we generate here? how much does msnbc's prime time lineup generate or current tv? how much of that do you see, sore kin? who are these -- >> i'm hoping when brian roberts comes back on the show you ask him that. >> you know, brian will probably come out here on a helicopter so why don't you ask him, if he does. i don't think he would be afraid to do that. moody's warning today that it may cut the credit ratings of 17 global and 114 european financial institutions, the latest sign that the eurozone debt crisis is spreading throughout the global financial system. the ratings agency cites tougher funding and the regulatory and

economic environment. among the companies in question, bank of america, goldman, citigroup, jpmorgan, morgan stanley, barclays, bnp, deutsche bank, hsbc and socgen. did i leave anyone out? >> no, and there was more than that. you just said among those. >> i did an among. >> pretty much all of them. i didn't see anybody left off the list. >> you can't do it but if you get one, we want one. >> if i get a helicopter? >> yes. it if you're going to continue to do this as you did yesterday and today -- >> right. everyone needs a helicopter. can they land -- can they pick you up in the backyard sna. >> my estate? >> of course. >> if they have a pontoon. no, they couldn't. they could not, no. >> let's get a check on the u.s. economic cal endar today. coming up at 8:30 eastern time, weekly jobless claims. the producer price index and housing starts.

then coming up at 10:00 we have the philadelphia fed survey. yesterday the markets did see a bit of a decline. a check on the markets this morning. yesterday the dow down by 97 points at the end of the day. this morning the futures are indicated lower down by almost 19 points. for the dow futures, s&p down by close to three points. if you want to take a look at oil prices after all the concern we've heard about what's happening in iran, you can see right now that oil prices down by about 50 cents, still sitting up above $100 a barrel at $ 0 01.30 and the ten year at this point, obviously the bond market activity will be foe focused on the jobless claims number. 1.917%. expectation is for an increase to 365,000 for the weekly number on those jobless claims up from 358,000 which is a surprise number last time around. take a look at the dollar and you're going to see the dollar is up across-the-board. the euro trading at 1.2997. all right. 1.2999. hadn't seen that in a couple of

days. gold prices, you'll see that gold prices are down by $9. $1,719 an ounce. a bipartisan tax cut deal early this morning under the agreement a payroll tax cut for 160 million americans would be extended through december. we knew this would happen one way or another. it was set to expire at the end of the month. the agreement also renews expiring jobless benefits and prevents a pay cut for doctors of medicare patients. no word yet on when the house and the senate might vote on the deal. keep an eye on that. foreclosure activity is edging higher. foreclosures rose 8% nationally last month as compared to december but they were down 15% from a year earlier. >> and global market news, japan's economy is starting to pick up. the government is sticking to its growth forecast and raising

on consumer spending for the first time in six months and china's foreign direct investment shrink iing for the third consecutive month in january. firms in crisis slashed spending by more than 40%. china's trade ministry is warning of grim times ahead and promising action to help struggling exporters cope with lackluster demand from abroad. >> also, spain's economy shrinking for the first time in two years. analysts say this could be the start of a prolonged slump as madrid implements some harsh austerity measures. and in sweden the central bank cutting its rate by a quarter of a percentage point to 1.5%. policy is makers say that the rate is likely to stay at that level, that very low level, until some time in 2013. right now it's time for the global markets report. ross westgate is standing by in london and, ross, we're wait to go see what happens in europe tonight. >> yeah, absolutely, becky.

stocks today are low. a number of factors going on here, of course. we think we're inching towards a deal in greece but it's taking a while. another meeting on monday where they hope to finalize it. the key sticking points particularly certain members, germany, the dutch and the fins, whether they really trust greece to deliver on their promises which is why this idea taking tax revenue into an escrow account to pay back the interest on the loans is going to be maybe a sticking point but at the same time it may be a case that greece just gets money in dribs and drabs rather than all of it and the big package agreed in one go. as we thought it is going down to the wire. ftse 100 off to slim gains. we're down nearly a percent. the cac up 0.4%. a big earnings day today and by and large companies reporting this morning have been pretty cautious in their outlook. nestle has been an outperformer. it was cautious about 2012. unlike unilever and danone it

expects margins on top of earnings. the big loser today, sector loser, spanish banks, spanish financials and you can see down here a lot of spanish banks, the weaker stocks out of the dow jones s it toxx 600, no longer applying today and so investors decided to make some money out of shorting spanish banks while they can. now this comes on top of the fact that we actually had another good auction today for spain. they raised just over the $4 billion they were wanting. bid to covers were good. yield on twof out of the three issues were lower. the key point is spain has now raised nearly 35% of their total planned issuance for the year and here we are second week through february. so they have raised a chunk of money. yields on the whole continue to be lower. spanish government debt steady at 5.51%. a good auction out of france today as well.

solid demand. the ltro impact still being felt. french debt yields set steady. but what is noticeable those concerns about greece have once again lowered bund yields, more demand rising on the other debt. yielding 1.83%. so we just have to see where we go in terms of risk sentiment as we monitor but today it has had an impact along with the big earnings season. back to you. >>s ro, thanks for continuing to follow the activity on the presidential campaign trail. polls suggest that rick santorum is coming on strong against mitt romney. the former governor's state of michigan. strategists say ron paul and newt gingrich aren't really factors in this race. the governor is expected to endorse romney today, though. romney is having trouble in the state because he opposed the auto bailout. >> did you read where romney was yesterday? >> yes. >> in your favorite publication. he was dialing for dollars, mitt

romney, and the law firm that was responsible for what, joe? >> for helping with the bailout? >> for the bankruptcy filing. >> i'll tell you what i saw, in "the journal" today there's a romney piece. >> his op-ed on china. >> last night watching one of the nightly news offerings on the broadcast i saw that romney would have let the -- was recommending to let the automakers die. >> yes. >> did you see that was the term? but then when you listen to him, he says he wanted to go through it. there was question whether it could have been done through normal bankruptcy. to say letting it die as opposed to what he said letting it go through the normal bankruptcy -- >> they played a quote from romney who said i didn't want it to be handed to the uaw. i want it had to proceed through the normal channels. he never said i want it hed it

die. >> i didn't see the story but i will say this -- >> you hear it all the time. >> if you have steve ratner or someone else -- >> mike jackson. >> there was none available. the options were let it die or save it. i think it was a black and white conundrum, if you will. >> the industry wouldn't have disappeared. but the other point is that -- >> if there wasn't financing. >> the bridge loan was started with -- >> bush. >> prior administration anyway. >> i don't want to be involved in the bailout so we'll give you $20 billion to get you through to the inauguration. >> he didn't want to tie the next administration's hands. >> he certainly didn't let it fail. but he didn't want to tight next administration's hands by making the decision for him. >> but he started the it it shall. >> becky is making an important

part f. he said we're not going to provide any financial, obama could have walked into an even worse problem. that's the argument. >> but once you start the support, the life support, it's going to continue. so i would say it was just this administrati administration. if you're going to criticize it they're just as complicit as the obama administration, or get credit as well for at least not letting it fail. >> i would go with the credit argument, too. >> we'll get e-mail on that. >> that's what we're going 0 to say from now on. certainly in the state of michigan. they're adding third shifts and you're seeing smoke from the factory. >> that clint eastwood ad probably would not have existed had there been the bailout. i'm not sure chrysler wants to advertise that. >> people that oppose it will say they're glad the auto industry is back.

they just wish senior creditors hadn't been stiffed by the rule of law, that the uaw -- >> the breaking of contracts. >> the breaking of contracts. >> contract law. and once you decide to rip up the contracts, it does put you on a different course. a lot of people were in favor of the auto bailout who were opposed to the way it was done. >> the whole issue of the ripple effect and all the suppliers and everything else that goes into the auto industry. >> we'll talk about that and more. i want to talk about the mitt romney op-ed. >> you do? >> i do. in the meantime, though, coming up, a very busy morning for economic data. we have key stats on jobs inflation and housing that's at 8:30 a.m. eastern. get a preview from a well known wall street economist maury harris up next. first, the man everybody is talking about. this is a cinderella story, a cultural phenomenon, jeremy lin, the knicks' point guard turning in 13 assistses to extend their

lead to seven blowing out the kings. darren rovell will be joining us at 6:50 a.m. one golden crown. come on frank how long have we known each other? go to e-trade. they got killer tools man. they'll help you nail a retirement plan that's fierce. two golden crowns. you realize the odds of winning are the same as being mauled by a polar bear and a regular bear in the same day? frank! oh wow, you didn't win? i wanna show you something... it's my shocked face.

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welcome back to "squawk" on this thursday morning. u.s. equity futures this hour a bit mixed but focusing more on the dow. we've been coming in off about 15 points this morning. making headlines, a listing application for its planned ipo of about a billion dollars in hong kong, the london-based company wants to join prada and other brands in china. citigroup reportedly agreeing to pay $158 million for submitting faulty loans to the u.s. government. "the wall street journal" saying that city mortgage allowed submitting ineligible loans to the fha insurance plan. as a result the government took losses when the loans defaulted. bank of america settled similar claims, the claim against

deutsche bank remains outstanding. >> we are counting down to the data on jobless claims, housing starts and producer prices due out at 8:30 eastern. joining us maury harris, we did get, maury, a heads-up on the improving employment situation on the claims numbers. pretty staggering. they seem to be a leading indicator almost. do you expect that to continue? >> yes. and it's partly because the underlying economy is improving and in the very, very near term we've had a mild winter. that helps us out somewhat on the claims. these better economic statistics go beyond the weather. there's something fundamental going on here. >> what happened? corporations have been doing more with less for a while and have been doing better. did that translate to hiring and the overall economy and the consumer? >> i think the biggest thing that's happened is for the past year and a half banks have been easing lending standards and it was really only the second half

of last year that we started to see banks do more lending and consumers and small businesses taking the banks up on that lending. and if you want to get to the genesis of it, i guess you could say that the qe1 and qe2 put more reserves in the system, liquefied the banking system. that money is finally trickling down to households and small businesses who formerly could not get credit. the credit crunch isn't is totally over but it's not nearly as restrictive as it had been. >> we heard there was money in the reserves but no demand from anyone to take the money even though rates were low, so then we're back to a chicken/egg thing, what changed to increase the demand from consumers and small businesses, so we're back to not knowing what the heck happened again. did housing improve a little bit? did savings rates improve?

>> well, there's a lot that we do know about this and, first of all, whenever you ease lending you've never had an overvalued response to that. the availability of money made a difference. i think what also made a difference technically is inventories being run down last year and that certainly removed some demand and some of the goods producing sectors of the economy. also what we've seen is the house prices have become so low that you finally have encouraged at least some borrowers and buyers to come back in and at least stabilize that market. >> are you saying that for a while the -- what we heard about the big, bad lenders, they weren't -- they were being stingy or at least paying attention to like the new rules of lending. we constantly said are you

hoarding cash and not lending it and they said, no, no, no, we're ready but there's no demand. are you saying that they were hesitant to lend? >> oh, of course. we're going back two or three years. they were very hesitant to lend but, in fact, they have become gr gradually more willing to land. they're tiptoeing back into the water again. it took a while 0 to get a business response from the small businesses. but this situation started to change. historically whenever you dump money on the system you just can't expect a real fast reaction. whether that money is dumped on the system through monetary policy in a qe or through a fiscal policy like obama's stimulus. you have to be patient. these thimgs don't work overnight. >> bankers said they couldn't find qualified loans. i think the definition of

qualified changed over several years in 2007 to 2010. >> between 2007 and 2010, you are very right. they certainly tightened standards. they probably overdid it. accord i according to the survey, they started to ease lending standards and historically when they do that, the demand will come back and it's done so again. >> we have jobless claims out today and i'm wondering how important that's going to be to the market, this whole picture of unemployment seems to have been improving according to the government numbers. we're looking for an increase but an increase to 365,000 off of a very low base of 358,000. how much importance do you place on these numbers today and what do you expect them to be? >> we think, in fact, it will probably be around 365,000. the difficulty in interpreting these numbers again gets back to the weather. the same thing will happen on

housing starts for january out this morning. you had favorable weather and one camp will say it's all good weather but, again, it's all the statistics are looking better it's hard to say every one of them is due to the weather. i think it has a lot to do with credit availability. >> all right, maury. maury harris, we appreciate it. thank you. a nice shot behind you. why is it blue? is it blue most of the time or for the giants? >> no. >> the knicks? >> could be for the knicks. >> i bet it's why. if anybody knows the answer to this, let us know why the empire state building is blue right now. when we compaq, we'll talk about general motors. they're pulling into earnings central this morning. phil lebeau joins us from michigan right after that. snickers bars may soon be a thing of the past. mars announcing it will stop

selling products with more than 250 calories in them by the end of the year. the maker of snickers, twix, m&ms trying to improve the nutritional value of its products but this change means the huge sized snickers bar which packs 540 calories will be gone by 2014. mars says it plans to reduce sodium levels in all products by 25% by the year 2015. you'll have to buy two of them instead of one. let's take a look at yesterday's winners and losers.

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welcome back. among this morning's top stories how long could we have just left that in the master rundown?

among the top stories and then the first word is greece. >> except that it went away for about a month or two, which we were talking about last week when you were here, i couldn't believe the market wasn't more amped up for this and thinking about it more. >> put portugal in there soon again. >> let's hope not. >> portugal it definitely in there again but probably not italy. but with what we heard from the italian -- the former -- but spain is still -- >> and italy says they're not going to go ahead despite the -- >> spain has that whole -- >> the banks? >> what are they? >> cahas. because their assets are caca. that's why i called them that. greece and european contingency, people -- the same helicopter people think that i think they're called cacas. they don't know that was

intentional. is that faber getting here? >> it's only 6:30. >> yeah, right, right. exactly. who does the -- who is this coming in? >> silvia. >> cnbc's silvia wadhwa. look where she is. she's in lisbon. i told you it would be portugal -- well, that's a lot nicer than that ugly sign, silvia. >> reporter: you don't say and the weather is a lot better. i've already been commenting on this that i must make a point of coming here more often to report about the crisis or about other things. yes, we've got the troika moving in to portugal to look at the progress of the portuguese economy and the portuguese government making on the restructuring process and in many ways this is symptom attic. nobody wants to be greece. italy did he haefinitely says w the next portugal let alone the next greece, and the greeks don't want to be german. so nobody wants to be anybody else it seems at the moment. but the bottom line is portugal is kind of the poster child for

a reform process that is on track but still might not be working. we've seen unemployment numbers out this morning above 14%, rising, slowly rising. it's not exploding but still on the rise. it seems the economy as such is not on the mend but when you talk to politicians in brussels, politicians here in portugal, when you talk to representatives of the imf or the ecb, they're all saying, yes, the portuguese are doing what they need. they have the reform. they have the restructuring on track. they have privatization on track, are liberalizing the labor market, stepping on the cost breaks and yet we have the problem that the economy is deteriorating around us and of course the greater fear that portugal might not be able to return to the market as planned in september 2013 because of the ugly word contagion. we don't know yet how greece can mend. we've had another european eurozone conference call of eurozone finance ministers last

night where we said, well, we're closer. we are confident that by monday we'll have an agreement on the table and we've been there before. it's like the old song, sometime monday never comes. sometimes tomorrow never comes. we're limping our way from medium term solution, short term solution to solution. we've got more social rumblings of discontent, i daresay, and we're not 100% sure whether we should save ourselves out of the crisis or grow ourselves out of the crisis but while we all step on 0 the savings break it's difficult to stimulate growth and that's a great fear the portuguese have here. >> silvia, what's the real deadline, next deadline if it doesn't happen today, if it doesn't happen tomorrow, if monday it doesn't happen? when do you get to the point where you're to the point of no return in terms of trying to come up with some sort of a solution for greece because of what it will take to get an agreement passed through different parliaments?

>> reporter: i think greece is one of these cases when nobody can say whether there's a point of no return. there probably was a year and a half ago when we should have had a default within the eurozone but everybody was scared of that. and since then we're putting a band-aid on this, that and the other. there was a discussion already about a bridge loan for greece, who should come up with the eurozone, the imf, come ecb. nobody really knows. so i daresay the next will probably be okayed on monday and yet the europeans, the eurozone will keep the pressure up by saying, well, this is the right step in the right direction but we need more from you and at the same token, of course, we have a great danger out there on the political scale that there is a dissemination there because now already we've had the greek prime minister stepping up and saying who is this german finance minister? how dare he tell us greeks what to do and who the hell are the

f finns and the dutch. maybe we're the people who are paying for your bills. this is something we don't need in europe but which is, unfortunately, sort of cropping up every once in a while and might get worse as, of course, money gets tighter and usaustery bites more and more. >> some of the back and forth with that got really ugly going all the way back to world war ii and bringing up some issues that are not at all helpful for what's going on in europe. >> reporter: no, that's exactly the point. if we are on the way to more european integration, we're talking about fiscal compact, we're talk iing about fiscal union, then the last thing we should do is us germans and you greeks, after all, if if you look at states like -- if you look at countries like the u.s. and, indeed like germany, we're federal states, i come from the ryne land, someone else from bavaria or in the u.s. somebody from texas and somebody else from idaho and still you're all americans. europeans are very far away from

the point we can say we're all europeans, it doesn't matter whether you come from portugal, greece, or germany, sadly so. >> thank you very much. we'll talk to you again soon. meantime, general motors is at the top of today's earnings calendar. we find our phil lebeau in detroit this morning. we're all looking for some numbers. what exactly is the street expecting? >> reporter: it's going to be a strange day because ordinarily you have the most profitable year ever for general motors, you would expect people to be celebrating. when you look at the numbers and we'll see next hour here is an expectation of what we'll see, you're not going to look at the top line or the bottom line. you'll be looking at europe and that will get a the lot of focus. the street expecting 41 cents a share, 1.81 billion is what they will earn on revenue of $38.2 billion. bonuses for the white collar work e workers will be lower because the company is going to be missing financial targets. a couple of moves being made yesterday, it announced it's freezing its pension plan, transitioning them over to a

401(k) plan because the pension plan is underfunded by $22 billion. it's been weighing on the bottom line for the company, that's one of the moves it's going to be making but the headline today, most of the headline from general m general motors when it comes out with earnings, what's going on in europe? this is a mess. they're going to be posting a loss expected between $300 million and $350 million for the full year europe may lose as much as $925 million. by the way, guys, go back to '99. what's happened with gm and europe? it's lost almost $15 billion. and that's the reason while this stock has rebounded over the last three months generally speaking investors have been looking at europe and saying you have to bite the bullet at some point and that's why this stock has not been performing relative to where it came into the market. the ipo. we'll talk about europe, the full year earnings coming up at 7:40 with gm cfo dan ammann

first on cnbc. we'll get a breakdown as well as talk to him about what steps the company might be taking in europe. we expect when the numbers come out at 7:30, becky, they will make an announcement regarding steps to be taken in europe. not concrete steps because they have to work 0 with the unions and the governments in terms of closing down plants but at least initial steps in terms of shoring up what is just a mess in europe for general motors. >> okay 0. phil, thank you very much. we will see you in a little bit of time. if you have comments, questions about anything you see here on "squawk" shoot us an e-mail. coming up, zynga, groupon and linkedin. the ipos everyone has been buzzing about. as they settle into the realities of being public companies are investors still smitten? we'll find out coming up next. [ male announcer ] technology accelerates at a relentless pace. anything not moving forward... is moving backward. [ tires screech ] [ engine turns over, tires squeal ] introducing the 2013 gs,

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we're back this thursday morning. wall street getting ready for more ipos in the pipeline. top of mind, facebook. investors are trying to figure out what to make of some recent companies that have gone public. joining us now the president and editor of i po desktop.com. good to have you on the broadcast. >> thank you. >> joe is giving me a hard time because it's not a broadcast. it's a show. it's a cable show. >> we don't broadcast. >> sorry, francis. >> francis, you think about the facebook ipo, you think about in light of what's happened to zynga, you've seen that stock come down, groupon, that stock has come down. are we losing a little bit of the gloss on all of these social media ipos? >> yes, i think last year was the year of the social media ipos. i think nobody made any money there except the traders.

they've had a debt cap balance but they're all off their highs and it's like there's blood in the street for the investors. nobody is really talking about that. in one sense if nobody has made money ever on those stocks, the rest of them are off, why would anybody make money on facebook? and if you look at -- we'll see when you do facebook you want to be up 15% and they'll call it a day. you mention ed zynga. zynga's guidance for next year is -- for this year, 2012, is up 21% on revenue for 2011 and that's about a 4% quarterly rate. that's not high growth. and it's really important to look at that because zynga accounts for 30% of facebook's after tax earnings so if there are many drivers it's only up 21%. that doesn't say much for facebook's valuation. the other thing zynga sells at five times earnings. you mentioned groupon.

according to guidance for march is only up 5%. that's not growth. >> francis, i wanted to ask you about compensation particularly related to facebook but in the context of what we just saw in one of the releases on zynga is their results and the reason they had a loss was it included $510 million of compensation expenses from stock that was issued to employees. what happens to facebook? i assume that's a number that's going to be even much bigger? >> we'll have to see. what will happen is the analysts have given a pass to zynga and to groupon and linkedin. they have their item called adjusted earnings and what that is, that's where the stock is taken out. they don't do that normally with stocks. on the other hand if they're an analyst or investment banker, those all had low percentages sold in the ipo, they're just trying to grease the palm so the companies can call it adjusted earnings.

so it is what it is. whenever i'm looking at companies, i don't adjust for it. and people really shouldn't. >> are you worried or thinking about the secondaries meaning the companies have come public with only a very small float and at some point you would imagine they're going to put more on the market and what kind of pressure that's going to put on the facebooks of the world. also i'm thinking of the lockups are going to be coming off soon and i'm curious what that may do to the facebook ipo. >> right. when the lockup is 180, typically more stock comes out sometimes on the side, mostly on the secondary. that's a simple supply/demand issue. the price of the stock will go down. and that's held linkedin down. they're just poised to sell. i think groupon is not a dot-com bubble, it's an explosion in valuation. the companies are pretty much going to stay in business but the valuations are too high based on according to growth rates.

>> thanks for getting up early, you're out there in l.a. what time is it out there in l.a.? 4784:00. >> it's definitely not a live shot behind you. >> we need a sore kin board to subtract three from six. >> thank you. we're coming up on 4:00. how about that? it's tough. >> still to come, linsanity. darren rovell joins us. he's no kate upton, is he, darren? >> we had the best transition from linkedin to lin. seven is wins in a row. the story of jeremy lin next.

[ kareem ] i was fascinated by balsa wood airplanes since i was a kid. [ mike ] i always wondered how did an airplane get in the air. at ge aviation, we build jet engines. we lift people up off the ground to 35 thousand feet. these engines are built by hand with very precise assembly techniques. [ mike ] it's gonna fly people around the world. safely and better than it's ever done before. it would be a real treat to hear this monster fire up. [ jaronda ] i think a lot of people, when they look at a jet engine, they see a big hunk of metal. but when i look at it, i see seth, mark, tom, and people like that who work on engines every day. [ tom ] i would love to see this thing fly. [ kareem ] it's a dream, honestly. there it is. oh, wow. that's so cool! yeah, that was awesome! [ cheering ] [ tom ] i wanna see that again.

♪

everybody else has got the knicks jerseys on. you had to leave the tags on because we can't afford. >> right. >> i had it out like they wear, tag on the hat. >> i'm a company guy. i don't want to blow $57. >> i left them on. >> but you were worried about your hair. >> yeah. i wanted the big neck. >> i'm worried about the hair coming off. number three i live in new jersey and i'm a nets fan. i don't like the whole media --

>> you don't like linsanity? >> i'm not a knicks person, i'm sorry. >> i'm not a knicks person i'm a bull's person but i like to hear -- >> this is a great story. >> fine. >> so -- so last night it was a double-double for jeremy lin and that's not from in and out and they went, knicks win by 15 points and the "post" is wish upon a star. look at that. alley-oop is amazing. they win easily by 15. the kings are a bad team. so what? i want to show you model. he were at model's yesterday. they ordered 168,000 pieces of lin stuff. talk about the biggest risk to a business. he had no problem with that and they are people waiting online. let's look at the average price on the secondary market of knicks tickets. you can see in this chart

basically for each game it goes up like that. so basically he started on 2-6. after that everything goes up. odds for the knicks to win the championship were when he first started 40-1. now they are 18-1. the odds for him to win the mvp are now 40-1. one betting company sportbook.com had to reduce to it 25-1 after they got $12,000 on 50-1 yesterday. it was amazing. let's show you the best sign from yesterday. people are sick of puns. linderella. i counted yesterday on steve liesman 's suggestion. "new york post" had 13 lin puns. >> i heard an interview with him. the reason i'm so excited about him he's a total team player. he says when you go into practice, everybody is happy to be there, this is a team that works together.

>> let's find out when carmello comes in. >> he says he's not the greedy player he claims. >> that's what he said yesterday. but when you have the ball in your hand and going for the ball it could be a different story. just an amazing story. >> how long does this last? >> in linity and beyond. >> did you come up with that? >> no. >> to linity and beyond. >> i want you to do what you were doing before. >> which one? ♪ if you dish upon a star ♪ pass happy lin get streaking nets ♪ ♪ two .500 everybody win as prize on thursdays ♪ >> we have to get out of here. thank you very much. of what's going on with your portfolio.

we know all this because we asked you, and what we heard helped us create pnc wealth insight, a smarter way to work with your pnc advisor, so you can make better decisions and live achievement.

money and power. the investment guru who manages billions of dollars in assets, wilbur ross will join us. >> no room for error. >> shortly becoming the emperor and empress of japan. arnie sorenson on the hotel operator's quarterly results. >> plus the road map for gm. company's earnings are just moments away. we'll have instant analysis and reaction from the company's cfo as the second hour of "squawk box" begins right now.

♪ good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick along with joe kernan and andrew ross sorkin. there is no greek deal just yet. the greek leaders say they have now met the demands made by international lenders to try to secure a second bailout panel. euro group president does say that there are still a few details, those that need to be ironed out but he's confident that everything will be finalized on monday. home foreclosures here in the united states were down by 19% in january from a year earlier. however, activity is expected to pick up after the nationwide legal settlement over foreclosure procedures that has stalled the process in many states. chip maker nvidia is under

pressure. their out look fell short. they are citing a flat computer market and competition from smart phones and tablets. they have been trying to address. we're watching the futures overall and seeing some red arrows. s&p 500 down by three. andrew? >> joining us now for the next two hours a good friend of the program, wilbur ross. great to have you here, wilbur. good morning when it feels a little bit like groundhog day when it relates to greece at least. we have had some news out of portugal. i don't know if you think the story is moving. i was reading through some of the notes and you suggest that the way they are approaching some of these bailouts and restructuring is setting a very bad precedent. why do you say that? >> i feel that because greece is being rewarded for failing to live up to its commitments.

every time they fail to live up to their commitments they get more concessions out of the eu or out of the private-sector lenders and i think that's a message that won't be lost on spain, portugal, italy, whoever comes next. >> if our on the other side of that trade what's the alternative? if you're germany, do you have a choice in >> i think at the end of the day they make a deal with greece and i don't think you have the disorderly disruption. i agree with that. i just think that greece is outmaneuvering everybody else. >> outmaneuvering, makes it sound like they are getting a great deal. if you look at the nation they have dealt with some really big set backs. it shrunk by 7% just in the fourth quarter. >> it certainly has. it will shrink by more if they implement the new programs. but what do you think would happen to it if it just dissolved. if they tried to go back to the drachma. what happens to the banks. what happens to international

trade. what happens to the whole economy. >> who gets the worse end of the deal if they do leave the euro and go back to the drachma? do you think the greek are the ones who wind up bearing the brunt of the big problems? >> i think they eventually do because they are a trivial percentage of euro together and in the world. once they make that big move whatever would happen will happen. i think the european currency is much better equipped and the european economy is much better equipped to handle a greek situation now than they would have been a year ago. >> it's good they sort of extended it out. >> i do in an odd way because the ecb is finally starting to act a little more like the federal reserve. remember their technical mandate is simply fight inflation. >> do you think it took a year of sort of mental gymnasts?

>> greece and germany if they just dealt with it. >> it's europe. >> professional can kickers. >> professional can kickers. but also life is -- you know we don't live to work. it's a beautiful bay. i'm in an olive grove. what would you do? would you go run off to a meeting with pale bureaucrats. >> europeans used to boost we're the leisure economy. america is the work economy. we're the leisure economy. >> i believe there's some truth to all this. you got all those desperate, separate economies and no way to do there what we did here. this is the best we could have ever gotten out of them. >> you think that the best thing might actually to be let greece go because it sets an example for everybody else to get in shape? >> size of philadelphia without the cream cheese.

>> that's true. >> maybe philadelphia doesn't matter but the question is and i think the question is what happens to portugal and spain. >> fundamentally it's an issue of the banks and with the monetary moves that the ecb has been making, the long term loans to the banks, liberalizing collateral, all things that have been put in and his predecessor not willing to put in is a big difference. now you have a lender of last resort where a year ago it wasn't clear you did. remember they were fumblilng about the efsff and all that. >> i want to change topics on you for a second. i want to talk about the volcker rule. the comment period ended monday night. we talked to hank paulson yesterday. he said that he didn't think the volcker rule really mattered meaning the protry tear trading was not the problem. if you had to offer your comments, not in the form of a

letter but maybe somebody is listening. >> well, i don't think proprietary trading remotely caused the crisis. that isn't what did it. with the exception of aig the home mortgage problem wasn't caused by proprietary trading. it was the reverse. it was people who hedged themselves. >> do you think the rules are a mistake? i ask that because a number of banks, regulators and a number of letters from just plain old vanilla american corporations submit letters saying the volcker rule may create problems and possibly systemic problems for sovereigns and the like. >> it's very likely to for a couple of reasons. those people had been a big source of liquidity in a whole variety of markets. if you don't have market liquidity you'll have more volatility. >> so paul volcker writes a letter in support of the volcker rule and says liquidity is

overrated. i'm paraphrasing. the more liquidity you have that can create speculation, that we shouldn't actually be all in search of more and more liquidity. is he right or wrong. >> liquidity is like oxygen. it's overrated except when you run out of it. >> then you notice it immediately. >> then you miss it. >> do you think we're approaching all of this regulation in the right way? >> no. >> in terms of the banking regulation. you obviously own a bank or two and have owned a lot of banks over the years. >> it's very different. we're in smaller banks which are getting bothered by a lot of the bureaucracy and a lot of the rulemaking president rulemaking. at bank united it's one fourth of the bank that was sold to capital one and we have four times as many people in compliance as he had. that's a 16-1 ratio all because of the new rules. >> talking about compliance there was a story a couple of weeks ago, blackstone, one of

the investors tried to pull out because of these transparency rules that go back to the individuals who own the firms including yourself and how much you have to disclose to the federal reserve. how much is that a problem? >> it's not a problem for us. we disclosed everything that needed to be disclosed. that particular rule didn't bother me very much. >> you probably had conversations with some of your peers though who did bother. >> there are people who feel differently about it. but to me if you're in a regulated industry you should have disclosure. i don't see that's a big deal. >> wilbur, we're going have a lot more with you later. stick around. >> do i get a knicks t-shirt? >> he'll find darren. >> more importantly where your going after the show? >> palm beach. >> where did you think he was going. >> do you need a ride to -- work with me. do you need a ride to an airport

where you're going to get on a jet? >> actually i found i can hitchhike very effectively right in front of the building. >> you'll get picked up by a helicopter. do you know who our viewers say that you taught ride around in a helicopter with to kill two birds with one stone. bernanke. where you're just throwing -- you're throwing money outside. go with helicopter ben and that way the carbon footprint. is that not a good idea? what do you think of a news guy who comes to work in a helicopter. cool, right? >> i thought he came in a bicycle. >> exactly. see. >> all right. still to come this morning checking in with mary, international ceo elect arnie sorenson. later general motors cfr daniel ammann talks about the company's fourth quarter results. that interview just minutes away. stay tuned. ♪

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i don't know. hotel operator marriott is reporting fourth quarter profit of 46 cents a share. penny shy of estimates. joining us now arnie sorenson, ceo-elect of what will be called sorenson international i'm told. when does that happen, arnie? you don't like when i say that, do you? you think bill mayer is watching. so planning that. i made that up. good brand name. i've never heard of sorenson. >> after that dig the last time i was on i heard from him in about six seconds? >> you're kidding. >> we're not going to see that name change in my lifetime or yours. >> we always ask you the same thing. we have had some great jobs numbers recently. gdp not necessarily gang busters but do you see even more signs of some acceleration in your

business? >> we feel worlds better today than we did a quarter ago. >> worlds. >> wow. >> worlds better. when we look across the united states we see a reasonably broad recovery. there's pockets of weakness. washington, d.c. will be the weakest market in the u.s. because of threats of government cutbacks if not actual government cutbacks. in the u.s. it looks like a broad recovery. europe is another story. >> tell us about it. >> well, in europe i think we're seeing a broad slowdown creeping across the continent. it may be not so strong or not so weak, i guess, to actually have us be negative year-over-year as we sit here today we expect our revenues will be up modestly a couple of points. but it's a concerning environment. it does have some positive news. look at chinese, indian and brazilian travellers they will take care of cities like london, paris and rome. when you look at the smaller markets in europe it will be a tough road in 2012. >> business versus leisure in

this country, and luxury versus upper sort of middle operations. how do those work out? >> we're probably still generally stronger the further up the chain scale you go. but, you know, when you're in the lodging business and certainly where our brands are positioned you're talking about middle market and above and that, in that space, really, the economy is well under recovery, we think. >> arnie, can you back up a minute and when you say you feel worlds better about the u.s. economy right now, what your seeing? that this is just a change that's happened in the last quarter because most of the ceos we talked to said this is a recovery, we're seeing some good thing but i haven't heard too many of them say this is a world of improvement just over the case of a quarter. what have you seen in particular? >> think that's a fair push back. when i say we feel world better it's really reflecting the deep

anxiety we had late in the summer and early in the fall. while we had that anxiety it really hadn't shown up in our business so much but we were all watching free fall in the markets, and huge amount of uncertainty in the way it might impact the united states. we just feel there's a lot more clarity today and that's what makes us feel world better. not so much the statistics are night and day different although they are stronger today than they were just a few months ago. >> in europe, you've got merits. you got this autograph collection. tell me about it. >> well autograph collection is a new collection for independently well-known hotels. we've added four hotels in europe just in the last few months. carlton in new york has joined us as an autograph. we have the cosmopolitan in las vegas. a way for independent hotels to join our system, be part of our

rewards program and resevere aviations platform and they see an immediate lift. it's the faster brand service launch. we have 30 hotels opened at the end. year and another 30 or 40 in our pipeline to open in 2012. really doing great. >> do you actually manage the autograph collection hotels or it's just access to your resevere aviation system? >> to bait they are franchise. we will manage a number of these as we go forward. not dramatically different from other brands. >> does he charge for wi-fi? are you going there again. >> arnie practical traveller question do you charge for wi-fi and why your charging for wi-fi. it seems to be the lower end hotels give it to you for free, the higher end ones charge you for it. >> because they can.

>> that's the way the system has developed in our industry. obviously there are profits associated in charging for wi-fi. for our more loyal guests they get it for free. it ties them more to us. one of the things we're all watching as we go forward is not just the need for wi-fi but the number of customers who are wanting to do video downloads and other things which are enormously consumpive. >> an e-mailer suggested that you need to make up for the fees on wi-fi, you need to charge on wi-fi because of the money that's getting lost through lodging and some of the on demand movies and we won't talk about what kind of movies they may be. >> i have no idea. >> arnie, how many of your upscale hotels have helicopter pads in case someone wants to

visit on his chopper? >> i have no idea but i'm happy to get you a list. >> where your planning to -- >> only at the autograph collection. >> i was thinking that. >> but you won't sign that -- how many will you -- >> we got 120 story ritz carlton hotel in hong kong. see if you can land a chopper on that. >> great idea. i thought it might be the a.s. collection, the arnie sorenson collection but you're not doing that either. >> saving you from that on demand video collection. >> you were asking him about porn again. why ask arnie about porn. coming up next the economic minister of portugal vowing the country will show it's not greece. that story and a check on europe. that's all next after the break. my job is to find the next big sound.

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i'll say that. >> reporter: yeah that's a good start, isn't it. as opposed to subzero temperatures in frankfurt or brussels and standing in rain, sleet or snow. yes, we did look around here in portugal. we talked to a lot of people. it doesn't feel like a country in crisis, i must say that. a lot of people are telling us from both sides of the fence yes we're doing everything we can. we're sticking with the reform program. we're getting somewhere. the economics minister told us this is our only choice. we must push ahead with the reform process. this is what he said. >> we are doing these reforms not because they are dependent upon us, we are doing these reforms because we need to do them in order to grow again. this is why we were able to sign that pact with the unions because there's a consent us in port fwal we have these problems and the only way of overcoming those problems so unite our

people and to implement reforms with great conviction and that's what we're doing. >> reporter: of course portugal insists they are not another greece. in many ways they are right. they are diversified, albeit small economy. trade unions for the reform process. they got their privatization rolling. a couple of big privatizations which they executed. you look at the unemployment rate up again 14.2% and rising. and there's a fear of a credit crunch for medium and small size companies which is indeed what we have in all of europe and the greater fear is that there's contagion from greece. but the minister denied, he said there's no way out for us in the sense, we stick to the program and an option in opting out of the euro would be absolutely suicidal, we're not contemplating it at all and not a solution for portugal. we must find our solutions

inside the euro and inside the eu. >> thank you very much. folks, if you have any comments or questions about anything that's happening in greece or europe or anything else we've been talking about, go ahead and e-mail us at squawk@cnbc.com. up next, gm's road map for success. we'll get quarterly results and instant reaction from the company's ceo. "squawk box" will be right back. ♪ .

welcome back to "squawk box" on this thursday morning. among the headlines that we're following, vest in china fell in january for a third consecutive month. $10 billion worth in january down .3% from a year earlier. infloss the u.s. rose strongly but is not surprisingly investors from european countries dropped. more chinese cities are seizing ipads from retailers. this comes amid an escalating dispute between apple and china's proview over the ipad name. proview said it owns the name and apple is infringing on its trademark. apple said it bought the worldwide rights to that name. >> phil lebeau is standing by

with numbers for gm. >> is that miss for the fourth quarter for general motors, reporting 39 cents a share. the street was expecting the company make 41 cents a share. revenue just a smidge below estimates coming in at 38 billion. full year general motors made a record profit 7.6 billion but there's not a lot of cheering here at the headquarters. you gowin the numbers it's all about two worlds of gm. in north america making $1.5 billion. international operations primarily china making another 400 million. europe and south america those are the problems for gm. a loss in the fourth quarter of $600 million. we just talked with dan ammann. they are not giving guidance for europe or announcing any changes for europe right now. that's on the radar. pricing is the problem. we'll go inside and talk with dan ammann first on cnbc about these numbers as well as where general motors goes from here. again miss for the fourth

quarter. 39 cents a share was the profit. the street was expecting 41 cents. guys we'll talk with you and dan ammann in a if you minutes. >> supply fears influences the automakers going forward. crude oil supplies and a worry where gasoline price goss. traders are keeping their eyes fixed on europe. steven short, editor of the short report on currency, and michael wolf senior director of analysis strategy for mellon. short, we got oil now continues to rise. why shouldn't it rise if this economy in this country is for real and if europe, while you know de facto recession is not as bad as some people thought we should see oil rise. >> we should to the extent we could miss supply with regard to iran. here in the united states the biggest concern now is the loss of refinery capacity here on the

east coast. why do we have a lack of refinery capacity here on the east coast? crude oil prices are too high. refineries cannot make money. that is they cannot pass on the cost to consumers. we're now at a level here in the united states, gasoline approaching $4. demand is real. consumers are sensitive to this level. when we're at over $4 this summer demand will pull back further. you do increase the odds with oil prices continuing to go higher. look, europe is already on its way to recession. a lot of people think germany will avoid it. but if the germans and french are paying and will be paying 1.60, 1.65 euro for a liter of petro you do increase the odds of recession there. >> when we had that soft patch that everyone was predicting in double dip how much do you think was like last summer, how much of that was due to gasoline prices? did they go up at that time, do you remember? >> gasoline prices and crude oil

prices this year were rocketing higher because we had the arab spring, civil war in libya, we lost 2.1 billion barrels of oil to the market. the concern is iran. embargo or not, iran will sell oil. it has to sell oil. most likely to the chinese and to the indians who will then able to dictate price. so if we compare this year to last year, this year we have access to libyan oil. last year we did not. this year we have access to canadian oil. there's a glut of oil sending in the central united states. canadian oil, north dakota oil is trading at 75, 80, 85 dollars a barrel. that's $40 below what the global price of oil is. there's a lot of oil up there. we have access to it this year. the only thing that's haengd this year is the potential loss of iranian oil to europe.

>> just tell me are we going to $4 for gasoline -- >> definitely. >> we are. can gasoline in and of itself cause -- last year we were talking i don't know housing was double dipping. can gasoline itself cause the gdp to become slower? >> absolutely. if we look now prices on both coasts are going to likely to be at these prices closer to $5 rather than $4. so that brings up personal consumption expenditure up to 4.6, 4.7 cents on the dollar. above where it is currently. that's a lot of dollars that will be going towards gasoline this summer and a lot of dollars taken out of the economy in general. you certainly grease the skids for economic contraction with gasoline prices on the path that they currently are. >> don't gas prices go up every summer. seems to me it's a very seasonal thing. >> absolutely it is.

right now we're at record highs. it's a seasonal thing because we have to switch over to summer grade gasoline, which requires higher price feed stocks. you go in and manufacture in the summer gasoline does move higher. the problem is we have east coast refineries now paying over $120 a barrel for their crude oil. when you net that back to what it means in the consumer, we're talking about close to record high gasoline prices. so, yes, gasoline prices moving higher at this point in the season is a very normal thing. the rate at which they risen at this point and the path they are currently on is not normal and it certainly does spell trouble for the consumer in the months ahead. >> so where do you think gasoline prices peak out? >> at this point if it were left up to demand prices have peaked out right now. regardless of the metrics you look at, federal highway miles traveled, credit card receipt, gasoline station receipt, credit

card swipes the consumer is already sensitive to these price and demand is at record loss or at least decade loss. demand is already pulling back at this point. but, again, the market is concerned with regard to one iran and two the refineries here in the united states. this brings wall street into the equation. wall street speculators own 3.8, 3.9 billion barrels of gasoline. now we're talking about the loss of 300,000 barrels loss of gasoline production. wall street speculators own the next three summers of that potential refinery. wall street is betting on higher prices, and as we saw in 2008 wall street will get burned. the only question is will they get burned with gasoline prices at $4 or at $5. we kmoits going happen. we just don't know at what point. >> let's get to michael. tell us in a nutshell what you thought of those gdp numbers

from europe and what's happening in greece and portugal and its influence on dollar euro. >> well the gdp results clearly, were negative. we were expecting that. i think that in germany you have perhaps a less severe contraction, but nonetheless it looks like there's no way really for europe to avoid the fact that the problem with the debt crisis, with the greek debt crisis is going to continue to weigh on the economy going forward. in terms of sentiment on the euro, it appears that the bridge load or prospects of a bridge load to get greece past the march 20th refunding deadline that's spooked the markets somewhat. we have prospects perhaps of a new democracy leadership taking over in april. if so perhaps they can run on the prospects of growth and

employment which don't look particularly good in terms of carrying through with austerity measures. so i think right now you have several months here where the dollar could make some good gains against the euro. 125 is not unrealistic. >> that's weird. the opposite of what you're saying at the beginning the year. 130. >> not exactly. on greek troubles we believe that the dollar could strengthen. it wasn't going to 115, wasn't going parity. >> europe was oversold at 130? at the beginning the year? >> oversold at 135, oversold at 130, oversold at 126. heading back 120 and that's our view by the end of the year. >> the dollar might strengthen in the near term. >> that's right. gentlemen, i think -- i don't know what to wish for with the dollar any more because the market only goes up when the dollar is weak. >> michael, if greece gets

kicked out of the euro do you think it strengthens the euro? >> yes, it does. >> thanks guys. >> let's take a look at gm shares. company just out with its earnings. it came in with its highest profit ever on record. but the company lost money in europe and in south america and that want caused to it miss expectations bay penny or two depending on which of the estimates you look at. right now you see that stock has been slightly lower. bid is at 24.55, ask is at 24.60 after closing at 24.93. when we come back we have the company's ceo. "squawk box" will be right back.

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welcome back to "squawk box." i'm phil lebeau at the general motors headquarters in detroit, michigan where i'm joined by the cfo of gm, dan ammann on a day where you report fourth quarter earnings, a penny or two below estimates. revenues a smidge lower than good progress overall but still a lot more work to do in the business, a lot more work to do in europe, more work to do in south america, more work to do all across the company. >> let's talk about europe. a loss in the fourth quarter of $600 million. people are looking at these numbers and they are saying when do you make some substantial changes either cutting capacity, closing plants, cutting jobs,

full major commitments. i know you're already in a restructuring. when do you do more? >> let's look at the progress being made. we've been in a restructuring plan over the last two years. that plan was built around stabilizing a european economy. that restructuring plan developed significant results over 2011 over 2010. so good progress there. but clearly that's restructuring plan is not going far enough relative to the environment we're in now. we're making changes in the business. >> is there a hard and fast deadline where you say by the middle of this erwe would like to have capacity cut plans in place? >> the deadline is now. we've put in a number of senior managers in europe. made a number of changes in the team over there. we're in discussions with our unions. >> the pension freeze that you announced yesterday where you were transitioning 19,000 over to a 401(k), how much does that help you in terms of stabilizing

a pension that's been under-funded for some time, by $22 billion and it increased in the fourth quarter if i'm not mistaken. how much does that help the bottom line? >> one of many steps that's being taken. we've been clear in the last couple of years about our objective. we made a good amount of progress in the summer of this year around the uaw contract. this is one more step. we had strong asset performance in the pension plan over the course of this year. that's helped us a lot. we're taken a lot of step. >> talk about profit margins. 2.9% for the fourth quarter, 5.5% for the full year. you're nowhere close to the 9%, 10% that you would like to achieve to be competitive with the hyundais. >> there's more work to do. we made good progress but we're just beginning to see the benefits and impacts of the actions we've and the. this is a long term gain.

we have a lot of actions where they won't bear fruit until we get further out. >> dan ammann, cfo of general motors on a day where they missed the street. it was the most profitable year ever for general motors making $7.6 billion. still to come this morning some key economic numbers that could move the markets. jobless games, ppi, housing starts are all out at 8:30 eastern time. and sander levin will talk about today's hearing on the hill with tim geithner. "squawk box" will be right back.

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welcome back. we're going to talk the election with wilbur ross. >> jobless claims are coming up at 8:30. that's a key number for markets. there's expectation this number will rise because in the last week we got 350,000. if we get that number -- >> there's a seasonal component. >> some people think that number is too low. if we do wind up with numbers that are that low, it's probably just the continuing trend that it's showing -- >> one of the things that hank paulson said yesterday was that -- designee didn't say they would be revised. it was an anomaly. >> the election is coming in in

the last month or so. i mean you look at between the, i don't know whether i would call it the ineptitude of the republican candidates it's in greater flux. santorum won three. now michigan has come in to the fore. romney it's possible michigan could go against him even though his father has been well-known. he hasn't been there for a while. it's completely in flux. at the same time you got the president back at 50% for approval rating and the handling of the economy as we get better gdp numbers and better job numbers. are you a romney guy at this point? >> i am. i think that the good news is we're running out of pop up candidates. you know, there's no one left on the republican side. >> it could be a two man race now. >> well that's probably the way it should have been from beginning. >> nobody ever thought it would

be santorum. gingrich told him to quit. >> who would have ever thought it was herman cain. >> remember when he told santorum to quit. >> gingrich seems like an angry old man. >> if there's no pop up candidates that's great news, romney as come out and said i'm a son of detroit, he grew up there. if he loses michigan, what does that tell you about the candidacy? >> i think that would be a real complication. >> is it? is it all about the economy no matter what? my question is referencing could it be that a whole majority of americans would look and say either i want more government and more services or i want less government and more individual -- would they ever base an election on that or is it always the trend in the economy that dictates an incumbent getting re-elected. >> if you look at the polls people say yes we want lower tax, yes we want less government but yes we also want all these

benefits. so they want everything. >> on in trade we're 60% now on the president and it was below 50 for a while. >> that's the employment numbers. >> well, it's starting to go up when gingrich started to get traction. romney came back. it stayed at 53 or 54 then the employment numbers obviously and then gdp and just the notion. i forget how many people three months ago it was 3-1 said the economy is going or pessimistic about the economy. over 50% are optimistic about the economy. a lot has changed. will they vote that way? >> the economy is a little bit better but you still have huge unemployment. eight something is still a very, very scary number and particularly the long term unemployed. >> can we have wilbur speak to the michigan issue that we spoke about in the 6:00 hour. >> just explain to the viewers what the conversation was?

the conversation was around whether gm would have failed, whether the auto industry would have died was the phrase had someone not stepped in. it's a very political issue. >> you're an auto parts genius. >> we're an auto parts suppliers so we're very concerned about the gm and about the chrysler. >> when romney says that it should have gone through a regular bankruptcy, is he, is that a euphemism. >> who would have made a $8 or $10 billion financing. >> is he suggesting that or isn't. >> didn't see a lot of people lining up to do it. maybe bain would have come in and bailed out general motors. >> a lot of people that will take that side of the argument. >> take which side of the

argument? >> let them fail. and purists with that you side of the argument. >> i don't think romney was saying let them fail. >> what he was saying there would have been another way to do the bankruptcy. >> that didn't give so much to the unions. >> the people on the front line as we said, like wilbur and steve radnor suggested if you were there there was no other opportunity. >> up see where gm is with europe and the push back it got with its unions. >> gm and chrysler have been remarkable turn arounds and much better than anybody could possibly think. >> and ford. probably wouldn't have disappeared even though the supply issue would have been. >> but he wanted that bailout. >> ford obviously wouldn't have -- people in general, you heard paulson yesterday, people in general don't want the government to have to do this because it throws the whole

capitalistic system into disarray and flux. >> it goes back to what wilbur said. people want certain things because they think they need them. it goes back to that article we talked about in sunday in the "new york times" about the safety net. people say they don't want the safety net. but when it comes to the individual issues that impacts them they want it. >> remember too, the big number of employees is not at gm and chrysler and ford. it's at the suppliers. the suppliers have seven times as many employees as the big car companies themselves. without somebody providing the liquidity to the car companies they wouldn't have been able to pay their bills to the suppliers, and the supply chain would have failed. that's the part that would have gone down. >> the bailout itself, the t.a.r.p. all the way to the auditorium it was bipartisan. started with the republican administration, started with bush, he did all t.a.r.p. he had paulson there. that was all bush for t.a.r.p. also gave the bridge loans to

the autos. if you hate bailouts you can't blame either party or if you love them you got to give credit. >> still to come, some breaking anybody had news. we'll get those jobless claims and more. timothy geithner heads to the hill today. we'll get a preview of his testimony. "squawk box" will be right back.

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the dow posting its steepest decline the year. will greek fears continue to weigh on the market or will the bull bounce back. a budget battle in congress. we'll talk tax, the deficit and the volcker rule with republican senator bob corker and break down the president's budget with the ranking member of the house budget committee. >> a deluge of data. housing starts producer price index and weekly jobless claims due out at 8:30 a.m. the third hour of "squawk box" begins right now. ♪

welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. our guest host is wilbur ross, chairman and ceo of w.r. ross and company and he knows about everything. financials, autos, coal, turn arounds. he is loaded. anyway checking u.s. futures this morning, down 33 points or so. for a lot of you that have written in, andrew i was kidding whether he needed to get a wrid you. they wrote in wilbur can afford his own helicopter. yeah. if he needs one. >> share the carbon footprint. >> you going to share with ben bernanke as he's throwing dollars around pap lot of merit. >> if wilbur came with us we could throw more dollars out. >> absolutely. >> they won't be taxpayer dollars. >> that's true. >> he's very generous. >> could be a charitable

writeoff. >> hard to document bills you throw out the window. >> might not get the deduction for charitable contribution. >> earnings miss for general motors. reported earnings of 39 cents a share. that's below what the street was looking for. street had been looking for 41 cents a share. revenue game in at $38 billion. that was below expectations. gm reported a record year profit but what happened in europe and south america. europe losing $600 million. that's the key foe use for the street. we spoke to the gm cfo in the last hour and he laid out the challenges still ahead. >> we're growing profit and growing margins. good progress overall but still have a lot horse work to do in business. more work to do in europe. we got more work to do in south america. more work to do all across the

company. >> in fact we've been watching shares of gm today and they have been indicated lower this morning after this news. also keeping an eye on shares of chip maker nvidia. fell short of street expectations. citing a flat computer market and increasing competition from smart phones and tablets. in our european headlines no decision on a second aid package yet for greece. this is really getting, dragging on. european leaders postponing a decision until monday when eurozone ministers will meet. a german government officials maintains the greek side has to answer some questions. european equity selling off on the greek bailout news. a lot of news coming out of portugal as well. we have that to look forward to. >> we'll be talking about portugal for years.

>> yeah, probably. >> we got a big day for data this morning and markets. we got jobless claims, ppi and housing starts all out in less than 30 minutes. joining us now, jim paulson of wells capital management. do i have to say, i probably should say jim you have been right. right? call a spade a spade. you've been right. he hasn't been worried. >> every dog has his day in the sun. >> some people say you were a bull but this was the right time to be a bull if you were going to be. >> he knows it. that's a backhanded compliment. >> it wasn't meant to be a backhanded compliment. >> i'll take it. if that's the best i can get i'll take it. this time you've looked good. recent time, that's something. >> what an introduction. jim, we had another paulson, hank paulson on the show yesterday and we were talking about jobs and the jobs number

and he suggested that the jobs number may actually not be as bullish as some people are thinking in part because he thinks it might in an anomaly. do you agree with him? >> i don't. i think that, you know, we're enjoying several things that we haven't had yet in this recovery of late. we got the biggest and most sustained decline in the unemployment rate that we've had. unemployment moved to its lowest level of the recovery. we have the biggest and most sustained advance in job creation. a full year's worth of a persistent rise in bank loans. we got most of the data coming out of the housing industry showing its most liveliest sort of activity going on in that industry since the recovery began. we got a dow that's at new recovery highs. i think if you take the evidence as a whole, including job market is not just one statistic it's an array of statistics. >> what's your number?

we saw baron's over the weekend 15,000. kernan's is higher. where are you if we have you on at christmas time is the dow going to be? >> well, my target is for 1500. i think a big catalyst, what's driving the stock market up here in recent months is sort of reversing an overreaction to two fears last year. we got ourselves convinced that the u.s. was headed for an imminent recession and we were convinced europe was going to blow up and take the world economy down. i think proved have been an overreaction. last year the multiple on s&p went from 15 times earnings at the start of 2011 to 13 times at the end and now what we're doing is we're calming down about those fears and already the p mobile has gone from 14 to 13. ultimately it's is going to 15 times earnings this year. at $100 earnings about we'll get close to 1500. >> multiple expansion story too.

you know, when you try to poke holes in your own argument and i assume you do worry a little bit, you're saying maybe i'm wrong, when you think you could be wrong or think about what would make you wrong, you think what? >> well, i think longer term, not so much this year but longer term i'm mostly worried about inflation. i i had the fed is overstaying here. i think they got to get out of the crisis mentality mindset. we no longer need crisis policies any longer because the u.s. economy is no longer in crisis. and yet they are still employing zero interest rates. they are still talking about qes, even though we have a trillion and a half of excess bank reserves, we have an explosives growth. they need to back away from crisis policies and start treating this with recovery policies and the sooner the better because i think if the economy is gearing a little bit i think it is, i think we'll grow over 3% this year, that

inflation is going to become an issue down the road. >> jim, i gather you would not be in favor of obama's stimulus program. >> i'm really not, wilbur. i think we got plenty enough stimulus going on. we got a lot of self-stimulus. one of the reasons we're picking up right now is nothing that the federal authorities did, it's because the economy has been self-medicating itself. a year ago the national mortgage rate was over 5%. now it's under four. in the summer the m 2 money supply was growing at 5% now it's growing at 10. the dollar is 10% below where it was in 2010. we got a reduction in food and energy prices that's helping and some of that is being reversed. i think there's a lot of stimulus in the system even without the federal reserve orifice cal authorities adding more. >> let me ask you about that too, wilbur. we joke around with you riding around in a helicopter with ben bernanke throwing out money but

what do you think about qe3? >> i don't think it's necessary right now. i think europe is the one that needs the of quantitative easing and the best news is that mario is having the ecb act like the federal reserve. he's become the lender of last resort which the predecessor never was willing to do. you'll see europe stabilize if the greek thing unfolds. >> do you think there's a moment of reckoning across the board. you saw what we did here in the u.s. europe is following our lead. ultimately if you believe jim there's going to be, you know, a massive spike in inflation which means a massive spike of inaffiliation there to pay for this. >> i frankly think the safest trade is short treasuries. little upside risk in treasuries. if these scenarios about inflation come through they

could collapse. >> how about people who are waiting for that last year got burned pretty badly. >> that doesn't mean -- >> jim we have to run. do you want to take that same trade? >> i like that trade too. i agree with wilbur. i think the day we decide that the u.s. recovery is a longer recovery is the same day we'll worry about inflation and look at 2% treasuries and wonder why they are down there. >> jim paulson, thanks for joining us this morning. let's hope the bullish mentality continues. we're three days down. hopefully we haven't missed this streak. it is down? >> yesterday definitely. >> yep. when we come back we have the treasury secretary defending the president's budget on the hill later today. "squawk box" will be joined by the ranking member of the house ways and mean committee right after this. also three big economic reports later this hour. we'll bring the data and instant analysis and as we head to a

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welcome back. futures right now indicated down about 25 points. among the earnings reports that have come out this morning, discovery communications earning 86 cents a share for its fourth quarter. analysts forecasted a profit of 69 cents a share. that doesn't even sound possible. discovery benefitted from better than expected advertising growth during the quarter. also a lower tax rate but that's a big outperform and he's a friend of our show, and we've known him for years. that company, he is the media guy of the day. >> finding new ways to come up with -- new ways of television you never thought. >> when he shows up out of the sun valley, everybody is waiting for when he shows up. he's like the guy of the day. >> at the moment he's the man. he's been able to extend that moment for much longer.

>> $18 billion market cap for discovery. >> what is the market cap when he got there? >> less. >> really? i think it's gone up remarkably. >> it has. it was down, i think it's at least doubled. at a time -- there has been international expansion, obviously and that's been a big help. but to know that there's so many different angles that you can take other than just like nature type stories or animal planet or whatever, to know the reality stuff. he admits he didn't come up with a lot of that. "shark week." "dirty jobs." >> watching a new one. >> that may be a different network. >> there's something out there called "storage wars" where you follow the guys that break into the storage units to see what they come up. you get a bunch of junk or

$30,000. >> let's talk about some things that have been happening in washington that we're paying close attention to. treasury secretary tim geithner defending the president's budget in the house ways and means committee. sander levin is joining us. thank you for joining us this morning. >> good morning. >> the treasury secretary said that we're headed in the right direction and that the president's budget addresses a lot of the issues that are on the forefront. what was your take away from his testimony yesterday and we'll probably hear more from the senate. what was your basic takeaway from what he had to say yesterday? >> i think very, very persuasive. he outlined the basic issue and that is do we need to continue to support economic growth. that needs the emphasis and we are growing not as fast as we want, he said that, but we need to continue on the path. and those who try to shake his basic thesis, i think, came up dry. that was really the essence,

keep going on this path, growth is essential, and we need to have policies that promote that growth, we need to get a hold of the deficit, but continued growth is one of the keys of getting a hold of the deficit. >> we have a senator who will join us later this morning, senator corker, the treasury secretary is going before the floor today and plenty senators said they are not so continues cohn vinced about this plan, they would have liked to see more in the budget that tackled the spending side. >> he'll answer that very carrily. we need to do that. but his hanes point, and i think it's unassailable, i was listening to your report a few minutes ago and that is we need to have policies, for example, the payroll tax cut that hopefully will be passed in the next couple of days. we need to focus on the policies, helping boost infrastructure, helping to

continue to boost manufacturing. that point of view is solid and the treasury secretary will welcome the challenge from republicans because on this they are wrong. >> there have been other voices who are independent voice whose have come out and spoken such as david walker who has said that, he's someone that has worked on both side of the aisle, worked with three different administrations, both republican and democrat that said this budget doesn't go far now address serious problems to keep us from becoming the next spain, portugal or greece. in terms of making sure that we are living within our means, they say that not enough is done here. what do you say to that? >> the secretary pointed out how the budget talks about reducing our deficit. the percentage of gdp that's represented by our deficit. but i think the point is unassailable. we have now begun to return to real steady growth. we have to keep on that path.

and that will help to address the longer term deficit in this coy, we need to get a hold of the entitlement issues but not sacrificing continued economic growth. that was really the key argument yesterday. it will be the key argument before the senate. the secretary won it yesterday. we'll win it, i think today and tomorrow in the senate because he's right. the administration's policies have been working, for example the payroll tax cut has helped to boost our economy. providing unemployment benefits because people spend them. has helped boost our economy. >> let's talk about that congressman. there's a journal piece editorial, paid not to work. four year price tag. 2 billion and running for one employment. the article claims democrats have decided to make this a long term entitlement, akin to almost welfare and they point out even mr. krueger who is now a member

of the administration wrote in 2002 that higher and longer duration ui benefits cause unemployment workers who receive it to no longer look to find a new job and it makes almost, establish as class of people that are no longer even looking for work because they are paid not to work. >> i suggest anybody go out and talk to the unemployed. we have the highest percentage of long term unemployed on record in this country and there's a recent study by the federal reserve in san francisco that disputes the notion that unemployment compensation is essentially a disincentive. my suggestion is to everybody who is viewing your excellent program go out and talk to the unemployed across spectrum of this country. there are four people looking for every job. we have to provide the sub s subsistence. people worked. they were laid off through no fault of their own. they need a boost as they

continue to look for work. i think that position has been disproven. if there's a disincentive it's for a slight minority and as the reserve board in san francisco pointed out and other studies pointed out unemployment compensation is important for the individual and it's important for the nation's economy. that's basically the result of studies including that federal reserve study. >> i was surprised to see the administration was not in favor and i think you were not in favor of requiring the one employ -- unemployed to get more training. lack of education is the biggest impediment to reemployment of those folks. i was surprised to see that there was a reluctance to tie the two together. >> the reluctance has nothing to do with the importance of retraining. people like myself have been fighting for training and retraining funds.

the house republican budget cut retraining monies drastically, if they were to prevail. now the question was, do you require people who are unemployed to get a g.e.d. when there are 160,000 people on the waiting list for add on education and having that as an absolute requirement is counter productive. no, i'm in favor of tying more education to employment but to penalize people say 40, 50-year-old people who are in the construction industry, who are still looking for work saying get a g.e.d. before you can get unemployment or sign up when there are 160,000 people in this country who are waiting, that was going to be punishing the unemployed. now i'm in favor of linking education and employment but not punishing workers who are looking for a job. and the republicans have dropped that because it was not a

sustainable position. it was punitive. they've dropped it. >> well then how to incentivize the unemployed people to improve their educational skills so they are more readily employable? >> by having programs like taa. we've been fighting sometimes over republican resistance so that when people are laid off they can receive unemployment while insurance, while they go into trading and retraining. that's the constructive way to do that. no, no. it's not an issue of saying education isn't important. it's the opposite. people like myself say more training, more retraining funds. don't punish the unemployed while they are looking for work. they are looking for work. they are looking for work. >> all right, congressman levin, thank you for your time. >> coming up more of today's top stories and still to come it's a very big day for economic data. we're going get jobless claims, producer price index and housing

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coming up a flood of economic data. jobless claims, producer index

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jobless claims, ppi and housing stars. rick santelli is standing by at the cme. rick, the numbers please. >> and the survey says for headline ppi up .1. much less than expectations. we were looking for up half of 1%. last month's negative .1 remains unrevised. if you strip out the all-important food and energy month over month that's where the horsepower is, up .4, double expectations. last month's .3 unrevised. year of year numbers headline 4.1, core 3.0, thank goodness they are not using this for their inflation target. initial jobless claims move from a slightly revised 361,000 down to 348,000 and 3.53 million on continuing claims moves down to 3.42 million.

housing starts better than expected. just shy of 700,000 annualized, 699,000 and last month's revised higher from 657 k to 689. starts, what is that up about maybe a little less than 2%, 1.5%. permits right as expected, 676,000. last month 679. slightly revised to 671. listen if i just gloss over this on the housing, it's very good numbers. very good numbers. of course it's not going to reverse everything going on in housing. not going to take away foreclosures. it is better than expected. on inflation i'm sure everybody is going to dis the core number here but it's, you know, somewhat asymmetric, less on the core, definitely more. back to you. >> thanks, rick.

steve liesman is doing a macauley. your view of the numbers? >> i think it's a threefer. all three numbers are better than expected. on the other number, i won't throw that out. i can't sit here and say the zero four isn't trouble. there's a 2% increase in pharmaceutical preparations. it's a wholesale input into pharmaceutical drugs and that's a huge increase. gasoline up 2% but that should not be in the core. tobacco up .06 again. off 1%. those are taxes coming in. when i look at what we call it up the plain or up the inflation pipeline or whatever you want to call it there's some inflation all the way back in what we call

the crude goods. 1.5, zero six. this chart shows that the blue line is the commodities on a daily basis. the ppi follow each other nicely. this is before today's data, obviously. but it suggests there's some downward pressure on ppi. i brought this up to say why the fed says that it believes inflation is going to be subdued because it does not see the inflation coming from the commodity sector which is very influential. producer pricer versus consumer prices. >> what does that mean, producer prices in particular if they are not running as hot. we heard from a lot of companies like a dow chemical who have been able to pass on higher costs. are they going to start coming up with much better margin, wilbur? >> i think that's what this would imply because less pressure. >> been able to pass along the cost that we don't see?

>> so far. >> that generally is a positive for profit margins. everybody has been saying who has been in this seat on stocks that we reached the peak on roft margins if you get a situation where cost inputs are weaker and consumer prices tend to be what economists call sticky. they don't rise and fall quite as much. it's not pass through or taken away either way that in general you might not say that there's profit margins to expand but you kosai they can maintain what's lofty levels. >> jobless claims very good. we're very happy about that. this forebodes nonfarm payrolls in the 200 to 250 range. >> do you think the number last week was real? we were talking to hank paulson just yesterday and he suggested it was an anomaanomaly. >> why? >> i don't know if you saw the interview. >> the participation rate is

real. >> he's talking about the unemployment rate not the nonfarm payroll number which are two different things and two dirnlt surveys. one is household and one is businesses. let's talk about the participation rate. obviously if you have an ageing population you'll have that cohort 55-65 participation go down a bit. more and more people entering that cohort. your participation rate will go down naturally. even if we weren't in a completely different economic situation than we're in now you would still see that participation rate go down. >> although we've seen it go down faster than the changes in demo demographics. >> you have a younger cohort using this time period to go back to school and a piece of this cohort would have otherwise gone to school but one of the interesting theories out there is they were attracted away from school by great jobs in the construction business that guess what aren't there. i'll tell you particularly going into this number most of the economic research i saw suggested it would be a higher

number in the 370, 380 range and saying that that number was still consistent with an unemployment rate for the month that would have been steady and now i have to wonder, now that we're 348 this is a surprise to the down side. they said the seasonals worked against this number. >> the market doesn't seem to have taken a whole lot of comfort in all of this. the futures are still below fair value which is shocking to me because a week ago we didn't care at all about greece. >> a week ago we thought a resolution was imminent and now we're getting continued foot dragging. so it's something that's weighing on sentiment certainly. let not that detract that the u.s. economy is decoupling from europe. and with regard to this week's initial claims number it's a great number. but these numbers are really volatile which is why the four week moving average is the way to go. i'm looking at this number. you don't want to get too

carried away with one week. it does support a trend. >> the best you can say here, becky, is there's an expectation that government spending will detract again from the economy. the good development and this is sort of emblematic of our economy is that perhaps housing now will offset the drag from government spending. which if you think about it, minus one and positive one is still zero. so the best you get from housing offsetting government spending is no net drag to the economy, which still means -- i've not seen any of the datacom forward that tells me we're not still in a 2, 2.5% economy. i would like to see data that says we're in a 3% plus economy. that's so far -- that's good that we can at least stay at 2, 2.5 but we need a 3. >> these housing starts were in multifamily hit, single family

fell. but that is a transmission mechanism once ignited that will have ripple effects. we think how much wealth is in people's homes. when people look at my house might go up 2% or 3%. not the 8% or 9% during the boom but it's not a fall. >> the growth in multifamily is mostly a growth in people renting, not owning. so it's a very different thing in terms of its long term implication for the economy. >> we'll have to leave it right there. thank you gentleman, ladies. a multitude of people "around the table." good conversation. >> when we come back we'll talk about the battle over the budget in congress. senator bob corker will join us next to talk taxes, the defensive, the volcker rule. "squawk box" will be right back. oh! [ baby crying ]

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i advocated very strong tough regulation on the big banks. but i didn't advocate the volcker rule as a way to go. and the reason i didn't was at least from my experience that when i looked at the failures and the problems we're dealing with it didn't come from proprietary trading. >> information treasury secretary hank paulson speaking

to us exclusively about the volcker rule. joining us with his thoughts on that and on the budget, senator bob corker, a member of the banking committee. good morning, senator. how censor >> good morning. i feel so connected. i get our economic data from you. thank you. >> we like it that way. most of washington does. i was worried about, to get retraining now for unemployment you need a g.e.d. do you need a g.e.d. for congress? i don't think you do. hopefully that never becomes law. >> that could be helpful. >> you would like to see some changes. >> look the volcker rule could be fixed and it could be easily fixed so that it worked. i was not a proponent of it. but it could be fixed. and, you know, for those who think that volcker rule is such a great idea as written why don't they ask the fed and treasury why treasury bills and

mortgage backed securities are excluded. if the reason they are excluded is that our officials annuity would hurt the liquidity in those two instruments. we could fix it. the problem is the authors of the volcker rule don't want to fix it. as a matter of fact they want to drive it the other way and what they are using this as is a back door way of trying to reincorporate glass seeingle. that may be an interesting debate to have. again, the volcker rule -- i don't think we want our financial institutions out of the market making business and i don't think you want to drive that, those people that want to see good regulation, i don't think we want to drive that to unregulated markets. it can be fixed. just a little common sense could make it work. unfortunately a lot of forces around here that don't want to see that happen. >> what do you say about the budget that makes a mockery of the american people. is that what you really think? >> it really does. let's face it. this is a -- let's think about

it. our country has gotten in trouble because we've had politicians for years that have been willing to give citizens what they wish without asking them to pay for it and what this budget document does to me it's a political document. i think everybody has agreed to that. what it's done is really preyed on the weakness of americans and that is that you can have your cake and eat it too, we can keep going like we are even though these programs are insolvent. what the republican nominee whoever that is, what they have to do is appeal to the greater angels of the american people and say no we got to stop this. we need to move in a direction that made our country great for years. that is that we're willing to make short term sacrifices for the long term good of our country. this budget has none of that in it. and, again, i expected a political document candidly. the budget is not even worth talking about at this moment. i think what should be talked

about and we're spending a lot of time on the payroll tax, that's sort of the shiny object that the media is watching. but i think an indication of where congress is, is the highway bill. unfortunately what congress is getting ready to do in a bipartisan way which may mean that maybe neither party is ready to lead at this moment. what congress is getting read to do is pass a highway bill that has two years worth of spending but ten years worth of revenue to pay for it. so all of those people who joined in talk about going big, talked about bowles-simpson were continuing on in a bipartisan way. i hope that's not going to be case. to really continue to do the kinds of things that we've done for years to get our country in trouble. nobody is paying attention to that debate. >> senator, maybe you don't get it, but for me if i were going to try to get re-elected and i could promise everyone all the entitlements they are currently getting and that we're going pay for it by taxing 1% of the

people don't you under that sounds like a really, really good deal to me. you want harder decisions being made about the future and sacrifice? you don't get it. >> you know we got warned about it. i hope that's not how our country gets played out. >> great way to get re-elected. >> it is. when the majority can benefit at the expense of the minority you end up winning a democracy but look again let's focus -- >> you should get on board. >> i hope you'll keep asking me to come on. i just disagree with that. >> senator, wait a minute. you cited simpson-bowles and a lot of people think that's the way we should have gone with things. alan simpson said this budget is a first step towards getting some of these difficult decisions made it does have some caught and spending and some

revenue raising. granted rear not there 100% but simpson himself is saying this is a first step. >> i don't hear him say that. i'm sure if you say it i have tremendous respect for your. i'm sure he said it. i see it in a different way. this budget is such a nondocument i don't even really want to debate it. it's strictly a political document that does nothing and makes no real cuts. cuts that happen way out that we have nothing to do with today, they are not real, and so, again, this is not a real document. i did hear yesterday that secretary geithner says they are going to propose some new corporate tax reform. i look forward to that and i hope it comes forward. i'm excited about the economic news. i'm glad the private-sector is saying we shall overcome the bad behavior in washington. so there's some positive things that are happening but this budget document is not one of those.

>> are you sitting on a burr or what's going on? >> all i was going say, senator, this idea it doesn't go far enough. the idea that it's a first step. what i can't figure out is what the president is supposed to do. whatever side of the aisle you're on in this political climate and when you say it doesn't go far enough i go back to the health care debate and the republicans talking about death panels and all sorts of things. it feels like we're at an impasse. maybe we won't get there until 2013. i just 240e7 13 is better than this. >> andrew, i don't want to debate the budget because it's a political document. again it's not worth talking about. you're right we're probably unfortunately not going to teal with these issues until 2013. we have a piece of legislation moving now. it's congress. forget the administration. is congress going to continue

the same bad behavior that congress on both sides of the aisle has exhibited for years? where we pass a highway bill that has two years worth of spending but ten years worth of pay for. i think this is a real moment for congress to show that no, we're not going to do those things. we're basically with the highway bill creating the same exact problem that we have with something called the sustainable growth rate for physicians and each of you see us kicking the can down the road every year and a half because we won't deal with that on a long term basis. now we're getting that same kind of spine injected into the highway trust fund and it's unfortunate that andrew is right that during this political season, unfortunately, all of congress appears to begin to act very irresponsible and all i can say is all of those people that stood up and said let's go big, all those people who said we

need to embrace the principles of bowles-simpson, we need the principles of bowles simpson, we need to move towards long-term deficit reduction, hopefully all of those people, those same people, will reject doing what we're getting ready to do with this highway bill which is just more of the same. so we have an opportunity in spite of the president's budget to act responsible and hopefully over the next few days we will do that. but i am thrilled the economy is picking up. i thank the private sector for what it's doing. and i hope it continues. >> senator, just so i don't mischaracterize allen simpson's comments, he did say this is a good first step, good start, but he also said there's no tough decisions that are made in this budget. >> yeah. you know, becky, we all know we have to address the medicare issue. and to totally punt on that issue, to me, is incredible. we know we have to address tax reform -- >> we've got to go.

>> thank you. >> maybe he meant a good start. just any budget after 1,000 days. >> you know, that's right. we have a budget document. that is a good step. >> i read the whole story while i was sitting here. he said it's a good start to not let it go, be sequestered. coming up, the stock stories the street will be watching today. the latest buzz from the "squawk on the street" team. "squawk" is coming back right after this. [ tires screech ] [ engine turns over, tires squeal ] introducing the 2013 gs, with the lexus enform app suite -- the most connected information and communication technology available in an automobile. [ engine revs ] the all-new 2013 lexus gs. there's no going back. see your lexus dealer.

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welcome back to squawk box. let's get gown to the new york stock exchange. carl, melissa and jim join us now. we've been watching the jobless claims that came in better than expected. housing starts came in better than expected. you also have greece hanging out there. that seems to be what is driving a lot of sentiment today. what are you guys going to be watching. >> moodies downgraded the banks. certainly not a reason to rally at this point. the troubling price action in shares of apple yesterday. huge reversal. price action is terrible. yesterday apple accounted for about a fifth of the s&p 500's point losses and about half of the nasdaq 100's point loss. >> on a reversal like that, not to be too technical, it makes you realize there's a lot of hot money in apple. apple is really such a focus even what it's doing to amazon this morning with a very big

downgrade. look, we're kind of taking a breather. i think the breather has to do with the fact people got too emotional and too excited. >> we'll talk about whether it's more than a breather, though. obviously the miss from gm today. copper at a four-week low. euro at a three-week low. work through all those numbers. we'll have, guys, the winner of the westminster dog show is ringing the opening bell. we'll get his take on whether or not this rally is truly over or not. >> wait a minute. the dog? you talked to lucky? you mean the owner of the dog that won? >> no. the dog. >> malakai. >> that's lucky. >> you're going to translate, carl. it is one of those small dogs. you speak small dog. >> yes, i do. you speak large dog. >> i've got one of each. then one in the middle, too. i've got all three. you're right, i speak it all.

>> we're going to tune in for that. thank you, guys, we'll see you in just a few minutes. coming up, parting shots from our guest. re. check me out. everybody says i've got a friendly disposition and they love my spinach dip. 5 foot ten. still doing a little exploring... on it. my sign is sagittarius, i'm into spanish cheese, my hairline is receding but i'm getting a weave. (falsetto chorus) getting a weave. who wants some ronald tonight!? geico. fifteen minutes could save you fifteen percent or more.  are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news.

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let's get the final word from our guest host, wilbur ross. how do you see it playing out if the economy continues to improve, the president will be reelected, don't you think? >> it probably gives him a better chance than if the economy was bad, for sure. i think the real issue is going to be what happens in the congress. do the republicans keep control of the house? do they get control of the senate? and if it's a close enough race, i think those two are reasonable expectations. >> i wonder if it could all work out. if the president was re-elected, i don't think he'd need to tack as far as he has to the left. i think once he got re-elected and if it did turn out that it was a congress that maybe was divided, government, then maybe you would come back at that point and do some of the things that need to be done. to get elected -- >> certainly pre-election we're not going to see him go back. >> maybe post-election. >> post-election, i'm